Transport secretary, Grant Shapps, unveiled the Government’s white paper for the future structure of the GB rail industry, now known as the Williams-Shapps Plan for Rail, on 20th May. This will see the Government set a 30-year strategic plan for GB rail covering infrastructure investment and fares policy, designed to ensure money is targeted and used efficiently. This plan will then be implemented by GBR.
GBR itself will combine NR’s rail infrastructure duties with additional responsibilities for planning the network, setting most fares and timetables, and collecting ticket revenue across mainland UK. These responsibilities will be transferred by the Department for Transport (DfT). While it does not signal a wholesale re-nationalisation of Britain’s rail industry, the establishment of GBR does represent a centralisation and simplification of many heavy rail operations across England and to a lesser extent Wales and Scotland.
Among the main changes is the final shift away from franchising of train operators to a concession model, known as passenger service contracts (PSCs). GBR will design service patterns, receive fare revenue and rent rolling stock from private sector contractors by paying them fees for contracted use. “Private” sector operators (which includes, incongruously, entities owned by foreign governments) will be limited to operating the trains in exchange for a fee.
Although GBR’s inauguration is still two years away, suppliers of ICT equipment and services would be sensible to consider how the changes are likely to impact their existing relationships with NR and the additional opportunities that may arise.
GlobalData expects that NR’s annual ICT spend, which we currently estimate at around £840m per year, will increase significantly from year one of GBR’s existence. Existing ICT priorities for NR can be expected to continue, and even grow in scope and size, as new staff and new staff functions are added to NR’s 41,000 or so employees. This includes NR’s ongoing efforts to move towards self-service and collaborative technologies in its back-office and line of business ICT.
In terms of new opportunities, plans are already in place to simplify passenger ticketing options on the GB rail network by introducing flexible season tickets as well as a significant roll-out of pay-as-you-go, contactless and smartphone ticketing. Tickets will be sold through a new GBR website and mobile application, with a single compensation system for operators in England providing refunds. GBR will also create an integrated national timetable and will work with local communities and authorities to help plan the provision of services, ticketing, timetables and stations.
The increased focus on passengers may also provide a catalyst for NR’s ongoing, if drawn out, efforts to become increasingly financially self-sufficient, which includes plans to raise funding from the provision of wholesale telecoms connectivity along the rail corridor.
We also believe that the creation of GBR will help re-emphasise the importance of digital signalling to the rejuvenation of GB rail as a whole. The injection of an extra £350m in June 2020 to make the East Coast Main Line GB’s first mainline digital rail link, speaks to a greater commitment to digital signalling. This that may be expected to continue under GBR’s control, with feasibility work already being accelerated on key sections of the West Coast Main Line, Midland Main Line and East Anglia route. Any such growth will also provide attendant communications opportunities across NR’s existing telecoms network footprint.
Only time will tell whether the creation of GBR will deliver any or all of the benefits the Government envisages for it, including the much-hoped-for reduction in ticket prices on the GB network. However, there are good reasons to think that GBR will work better than the current, disjointed GB rail network, not only for passengers and train operators but for ICT suppliers too.